What is a No-Fault State & How Does It Impact Your Personal Injury Claim?

looking out front windshield of car driving on highway at dusk
September 29, 2021
Legally Reviewed By Stuart A. Richman, Esq.

Auto accident injury cases in Pennsylvania and New Jersey are different from the majority of other states. Both states are classified as no-fault states. Our clients often ask us, “what is a no-fault state?” In a no-fault state, an insurance company initially handles the injured party’s medical expenses and property damage. This occurs regardless of who is responsible for the accident. Your insurance company’s ability to handle post auto accident damages depends on the type of insurance plan you have. According to AllLaw, laws in no-fault states require all drivers to have insurance to cover potential injuries and damages caused by an auto accident.


No-fault laws ensure that accident victims are covered on first party benefits. Examples of first party benefits are medical payments, work loss coverage, and extraordinary medical benefits. Insurance coverage is only available up to the limits offered by your plan. Whether an auto accident is your fault or not, your insurance company would initially pay out all coverages to answer your financial needs. Payout obviously depends on the coverages included on your plan. When insurance shopping, investigate each plan’s maximum payout and the categories of damages an insurance plan will pay out. 

Driver’s insurance plans require personal injury protection in Pennsylvania and New Jersey. This protection means that your insurance company will provide you coverage for some economic losses, no matter who’s at fault. Thereafter depending on the type of loss, your insurance company may look to be reimbursed by the at fault party’s insurance company.

If the cost of your losses are greater than the maximum personal injury coverage offered by your insurance plan, an auto accident attorney would be necessary to recover the remaining damages from the at fault party. This would require proving the auto accident was the other party’s fault. Unlike the first party benefits, which are immediately paid, the payment of the remaining damages would occur after the auto accident case was won.

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While no-fault laws may limit some of your legal options following an auto accident injury, there are benefits. When an accident only leads to vehicle damage, you may have this damage repaired through your own insurance company. This insurance payout only happens if you have the proper coverages. While an insurance company may disagree about an aspect of your claim, pursuing an insurance claim is generally far less complicated and adversarial than pursuing a lawsuit. Additionally, the wait for payment on your claim is much faster than it would be through an auto accident lawsuit.


As explained by, no-fault states require insurance to have personal injury protection. This protection provides payout for expenses to the maximum amount offered by your plan. Payouts for categories of damages caused by an auto accident, such as collision coverage, wage loss, or uninsured/underinsured motorist coverage, is not considered unless your insurance plan has those additional protections. If your insurance does not have these protections, you will need to explore your legal options to recover damage payouts from the at fault party. This payout only occurs if you win your auto accident case. The payout would not be recovered until you win the case.  


Even though both Pennsylvania and New Jersey are two no-fault states, we have successfully guided our clients through auto accident claims for over 30 years! We take the time to answer our client’s questions, such as “how do no fault laws affect your personal injury case”? Rand Spear and the Spear Greenfield legal team have over 200 combined years of experience. Our experience centers around helping clients recover fair payment from auto-insurance companies! While occasionally insurance companies try to nickel and dime accident victims, our law firm will never sell you short! Our legal team is not only knowledgeable and experienced, but we are aggressive and will fight for your best interests! 

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